Following the Fire: Utilities and Insurance Companies Spend Big Bucks on Lobbying, Campaigns as the State Ponders Liability Laws

The Legislature's special committee on California wildfires meets on Aug. 7 in a hearing room crowded with lobbyists.Robbie Short/CALmatters

Between last year’s deadly wildfires and this summer’s fatal blazes, utilities and insurers with a huge stake in fires’ aftermath have poured more than $3.2 million into California campaign donations, and another $5.2 million into lobbying at the state Capitol—a big spike.

Now, in the final weeks of the Legislature’s session, lawmakers on a special wildfire committee are considering proposals to beef up safety of the electrical system and change liability laws. CALmatters reviewed new lobbying and campaign finance reports covering the first six months of the year. The takeaways:

Lobbying is up—by a lot: The state’s three big electric utilities together more than doubled their spending on lobbying during the first half of this year, compared with the same period last year. The increase was driven largely by Pacific Gas and Electric, which spent $2.2 million on lobbying this year—triple what it spent in the first half of 2017.

Between April and June this year, PG&E reported spending $1.1 million specifically lobbying on wildfire legislation.

“This is really the biggest issue facing our company today,” said PG&E spokeswoman Lynsey Paulo, adding that PG&E pays for lobbying expenses with shareholder funds, not money from customers.

At issue: Who should be responsible for and pay for fire damages? Under existing law, utilities are liable if fires are traced to their equipment—even if there’s no negligence. Gov. Jerry Brown has proposed changing the law to relieve utilities of some liability—protection they desperately want.

Edison, which provides power to much of Southern California, including much of the Coachella Valley, spent $1.3 million lobbying in the first half of this year—double what it spent last year.

Insurance companies are the utilities’ main adversary in this: If utilities become less liable, insurers will have to bear more of the costs from disasters. Insurance trade associations increased their spending on lobbying in the state Capitol by 51 percent this year over last.

There’s a whole lotta wining and dining going on: Most of the money utilities and insurance companies spent on lobbying went to lobbyists, lawyers and publicity campaigns. But the total also includes a lot of cocktails and steaks the companies bought for government officials they are trying to influence—nearly $69,000 worth of goodies for the first half of this year.

PG&E treated GOP Sen. Anthony Cannella of Ceres and six of his staff members to a San Francisco Giants game in May. In July, Cannella was appointed to the committee crafting wildfire legislation. He declined to comment for this story.

Overall, PG&E spent more than $3,000 entertaining government officials, including a breakfast in February for Sen. Bill Dodd, a Napa Democrat who is co-chair of the wildfire committee, and a lunch in June for Todd Derum, chief of the Sonoma division of Cal Fire, the agency investigating last year’s fires. Cal Fire has said PG&E’s equipment was involved in 16 fires, and that in 11 of those, the company violated state safety codes. Cal Fire has not yet completed its investigation of the deadliest blaze, known as the Tubbs Fire.

Edison spent more than $45,000 entertaining officials. That included a $12,000 reception in January attended by more than 100 legislators and staff members, and a dinner in March at a Los Angeles steakhouse for Lt. Gov. Gavin Newsom, who is running for governor.

The Personal Insurance Federation of California spent $14,300 entertaining lawmakers and their staff, including an $8,500 reception in March and a $4,000 soiree at a Sacramento nightclub in April. In addition, the trade association treated officials to microbrews, sushi dinners and other goodies, such as a $53 cake for an assemblywoman’s chief of staff.

Rex Frazier, the Personal Insurance Federation lobbyist, said government decisions have a huge impact on the insurance business because it is so highly regulated. “With that,” he said, “comes relationship-building with legislators.”

The victims advocacy group is funded almost entirely by lawyers: Fire victims are lobbying to preserve liability laws and pass new rules that could help prevent future wildfires. Their advocacy group Up From the Ashes is represented by a lobbyist who lost his Santa Rosa home in the fires. The group blames PG&E and Edison for not doing enough to prevent last year’s disasters, some of which were sparked by power lines too close to branches and brush.

Up From the Ashes spent about $564,000 lobbying between April and June, with about $55,000 going to a lobbying firm and the rest to a publicity campaign. Where did the money come from? Essentially, law firms involved in lawsuits against utilities.

“We appreciate their funding so we can have a voice,” said Patrick McCallum, the lobbyist for Up From the Ashes, which represents about 600 homeowners, businesses and local governments that lost property in last year’s fires.

It’s a bipartisan love affair: The industries involved in the fight over wildfire legislation aren’t playing favorites: They’ve showered dozens of Republican and Democratic legislators with large campaign contributions and pour huge sums into committees to elect politicians from both parties.

Edison gave $1.1 million to California political campaigns this year, including $250,000 each to the California Democratic Party and the California Republican Party. It also gave $25,000 each to a GOP group called California Trailblazers and the Democratic campaign fighting a senator’s recall. In advance of the June primary, Edison gave $29,200 each to Gavin Newsom and Antonio Villaraigosa, Democratic rivals in the gubernatorial race.

PG&E has given more than $900,000 in political donations this year, including $175,000 to the California Democratic Party and $110,000 to the California Republican Party. It’s also given $25,000 to a committee that supports moderate Republicans and $40,000 to one that supports moderate Democrats.

In addition, PG&E gave $150,000 to a campaign supporting Newsom for governor, and paid nearly $400,000 to a political consulting firm that ran Brown’s campaign for governor and is helping with Newsom’s.

The Farmers insurance company gave $96,500 to the state GOP and $10,000 each to the California Democratic Party and the Newsom campaign.

One lawmaker doesn’t want PG&E’s money: On June 4, PG&E sent $1,000 to the re-election campaign for Democratic Assemblyman Jim Wood. On June 30, he returned the money.

Wood declined to comment on why he sent back the PG&E money, instead saying through a spokeswoman that he did not solicit the donation.

But here’s a clue: He represents parts of Santa Rosa devastated by last year’s fires. Now he sits on the wildfire committee, where he’s questioning whether the Legislature should change liability laws before Cal Fire completes its investigations.